Todays news is that David Cameron is offering a 20% discount on 100,000 new homes built on brownfield sites. With the average price now reaching £250,000 that equates to a lofty £50,000 saving. It is now becoming clear that housing is going to be a big part of the next election with labour also announcing they will double the numbers of first time buyers by 2025.
If we where to include the “help to buy” scheme into these new figures then we end up with a total of 148,000 people that this government has already or will be helping onto the housing ladder.
A recent survey showed sixty five percent of nine million renters want to buy their own home, that being the case we end up with just under 6 million potential first time buyers. When you add that all up it shows that the government has committed to help a mighty 3% of them and that is even before you strip out the over forties.
The real facts of the plan are yet to be unveiled but there are already some spectacular gaping holes within this policy…
- What about those over the age of forty?
- Will these homes be of a sub-standard build quality?
- How quickly can they be built?
- Above all, will the prices be fixed?
A developer will, of course, want to make a return on their investment and the carrot of taxes being waived is a fine juicy carrot indeed. So what happens when they release these homes onto the market? The demand will be immense and if a bidding war breaks out then that twenty percent discount will be eaten up faster than any minister could imagine. That leaves first time buyers paying over the odds for cheaply and over hastily built homes at current market rates whilst the developer pockets a twenty percent extra profit.
Then there is is the case of what the developers will build? Whilst it is a lovely pastiche of the prime minister walking around an under construction development of fine family homes which generation rent can’t afford it would seem the brownfield sites mentioned are generally areas where people do not really want to live and developers don’t like to develop. If they did they’d have done it already. This means, alas, yet more glass tower blocks of tiny little flats made to maximise profits for developers, not the 2 or 3 bedroom homes that first time buyers actually want and David Cameron loves to meander around.
These piecemeal gestures of party politics don’t address the real issues with housing or renting, they simply show how frightened Westminster is of the huge slice of the electorate that is of generation rent and their parents who worry about them.
We wait to see the details in the hope that the prices of these homes will be locked down but it’s likely that squashing free market economics isn’t a favourable position for the Conservative party….